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WorksheetsONLINE TEST :2 INTERNATIONAL BUSINESS THEORIES
Total questions: 40
Worksheet time: 40mins
In Mercantilism theory, trade surplus condition is a situation where:
Export = Import
Export > Import
Import < Export
Holding of gold/silver
Zero-sum game is a 'win-lose' situation
True
False
Which are true about Mercantilism theory?
Country’s wealth is measured by its holding of gold and silver
Government does not imposed any control
Among the first theory and served as the foundation towards trading activities
Countries will try to be in a trade deficit condition
Absolute advantage theory was introduced by
Michael Porter
David Ricardo
Adam Smith
Raymond Vernon
Country will produce only ONE product that it has absolute advantage. This refers to:
Absolute advantage
Comparative advantage
Efficiency
Specialization
Resources available = 200 units for each country
Production in Ghana
Cocoa = 10 tons
Rice = 5 tons
Production in South Korea
Cocoa = 2.5 tons
Rice = 10 tons
Question: Which country should specialize in producing Cocoa?
Ghana
South Korea
Resources available = 200 units for each country
Production in Ghana
Cocoa = 10 tons
Rice = 5 tons
Production in South Korea
Cocoa = 2.5 tons
Rice = 10 tons
Question: Which country should specialize in producing Rice?
Ghana
South Korea
Resources available = 200 units for each country
Production in Ghana
Cocoa = 10 tons
Rice = 5 tons
Production in South Korea
Cocoa = 2.5 tons
Rice = 10 tons
Question: South Korea has the absolute advantage in producing which product?
Cocoa
Rice
Resources available = 200 units for each country
Production in Ghana
Cocoa = 10 tons
Rice = 5 tons
Production in South Korea
Cocoa = 2.5 tons
Rice = 10 tons
Question: After specialization, which country will import Cocoa?
Ghana
South Korea
In absolute advantage theory, with specialization, total world output will _______.
increase
decrease
remain unchanged
fluctuate
Which are TRUE about comparative advantage theory?
Initiated by David Ricardo
When a country has absolute advantage in more than 1 product, they should not specialize
When a country has absolute advantage in more than 1 product, they should specialize goods they most efficient
When a country has absolute advantage in more than 1 product, they should buy goods that they produce less efficiently from other countries
In Heckscher-Ohlin theory, factor endowments normally refers to ______, ______ and ______.
land
money
labor
capital
When countries make intensive use of locally scarce factors, they should ______ that product.
import
export
produce
specialize
Product life cycle theory was introduced by
Michael Porter
David Ricardo
Adam Smith
Raymond Vernon
Four main stages in product life cycle theory:
Introduction - Maturity - Decline - Growth
Introduction - Growth - Decline - Maturity
Introduction - Growth - Maturity - Decline
Introduction - Maturity - Growth - Decline
In product life cycle theory, a products mature, both the ______ and the optimal _____ will change affecting the flow and direction of trade.
location of sales
location of packaging
location of production
location of distribution
Global expansion allows firms to achieve all of the following except _______________________.
A) minimize returns by failing to capture skills developed in foreign countries
B) realize location economies by dispersing value creation activities on the optimal location
C) realize cost economies from experience effects generated by serving a larger market from a central location
D) expand the market for their domestic product offerings by selling those products in international markets
Companies that are successful at global expansion are successful at transferring their
A. competitive advantage
B. comparative advantage
C. core competencies
D. core advantage
Firms such as Intel or Texas Instruments that produce products serving universal needs follow a _______ strategy.
A) global standardization
B) localization
C) international
D) transnational
Apple Inc. suit with strategy _____________
international
global standardization
localization
transnational
Identify the second most traded currency around the world, also used in Italy:
Yen
American Dollar
Euro
Peso
The Central Bank of Brazil is the issuing authority of this currency:
Peso
Pound
Lira
Real
The franc is nolonger the official currency of France, so what is the official currency accepted today?
Gourde
Krona
Euro
Dollar
The peso is the official currency of which three countries listed below?
Mexico
Argentina
Spain
Cuba
Portugal
The Pound is the official currency of which country listed below?
Egypt
South Africa
Tanzania
Ethiopia
Nigeria
The Yen is the official currency of which country listed below?
China
Japan
South Korea
Vietnam
When the value of export is greater than the value of import, it is called__________________________?
Trade surplus
Trade deficit
Protectionism
Country's wealth was determined by the amount of its gold and silver holdings.
trade surplus
mercantilism
absolute advantage
competitive advantage
In mercantilism, The objective of each country is to have trade deficit and to avoid trade surplus.
TRUE
FALSE
When the value of import is greater than the value of export, it is called _____________________.
Trade deficit
Trade surplus
What is classical theory?
It is from the perspective of a country.
It is from the perspective of a firm.
Both A and B
Who introduced the theory of absolute advantage?
Adam Smith
David Ricardo
Bertil Ohlin
Michael Porter
They developed the Factor proportions Theory.
Heckcher and Ohlin
Heckscher and Olhin
Heckcher and Olin
Heckscher and Ohlin
If I am better at all types of production, I have the _______________In all forms of production.
comparative advantage
specialization
developed nation
Absolute advantage
When determining the comparative advantage, one must determine
Specialization
Opportunity cost
Absolute Advantage
Absolute advantage is on e of the example of theory under classical country based theory
CORRECT
WRONG
According to factor proportions theory, factors that were in great supply relative to demand would be cheaper.
YES
NO
In a culture with strong business and family ties
several members of a family may work in the same business.
family members are usually promoted first in a family-owned business
protecting a family member is sometimes more important than a good business decision.
all of these
Multinational corporations must adhere to the laws of which country (check all that apply)
Home country (country in which the business is incorporated
Host country (country in which the business is conducted)
Switzerland - where the world trade organization sets rules
None of the above
